Creativity & Entrepreneurism

Business experience is key to doing things right the first time, avoiding predictable mistakes, and riding out storms. But some situations call more for guts. Three leading figures from the History of Wireless—Guglielmo Marconi, Paul Galvin, and David Sarnoff—are great examples.

Marconi was a courageous visionary. When others said that wireless wouldn’t work, and even if it did there was no need for it, he only became more determined. That story has been retold many times. Less well known is how Marconi built a reputable business using incredibly primitive and unreliable wireless technology.

Marconi’s wireless technology was a step above smoke signals. The receiver could only detect the presence of a signal. To send a coded message, the transmitter had to be turned on and off at specific intervals and the receiver had to record the signals on a moving tape. Plus, at the time there weren’t separate frequency channels, so competing users had to take turns.

Marconi hid his technology’s weaknesses by hiring and training his own operators and offering wireless strictly as a turnkey service. He carefully avoided competition with cable-based systems. Still, he understood that the only way to grow the market was to continuously extend the range of wireless communication. He claimed the first transatlantic wireless transmission and milked it for what it was worth—and then some. The first message consisted merely of the letter “S” sent over and over in Morse code. There was no independent confirmation of the achievement.

But so what? Marconi created an important niche market and quickly dominated it. He wasn't afraid of anything or anyone. In fact, he made a convincing argument for granting his company a monopoly: Competition would endanger the safety of existing maritime users by causing interference.

Paul Galvin was another gutsy entrepreneur. His original goal was to build a successful small business. However, he learned the hard way that you have to aim much higher just to survive. After a string of failures, he started yet another business during the Great Depression. His company, Motorola, manufactured and sold car radios. He proved that a successful business could be built even during the worst of times by offering a lower cost solution.

His son Robert turned Motorola into a corporate giant. But it was Paul Galvin who got the boulder rolling by refusing to give up. Failure simply wasn't an option.

David Sarnoff deserves much of the credit for building the broadcast industry. But he is often remembered as a hard-hearted businessman. That’s an unfair verdict. Sarnoff’s job was to achieve the best financial results for RCA’s employees and shareholders. Even critics acknowledge that amassing personal wealth was never his top priority. He has been accused of cheating Edwin Armstrong (who invented FM radio) and Philo Farnsworth (who invented one of the first television cameras). However, years earlier Sarnoff made Armstrong a rich man by acquiring patents from him for cash and stock. RCA eventually paid Farnsworth a modest sum.

Lost in all of the recriminations is the simple fact that Sarnoff built the consumer market for radio broadcasting based on instinct and guts. He understood that to ensure success he had to think and act big. He needed volume to drive down radio manufacturing costs and attract advertisers. Years later, he introduced television despite fears that it would cannibalize radio.

I’m not saying that the wireless pioneers relied exclusively on guts. They surrounded themselves with experienced people and acquired their own experience on the fly. But what really set them apart was their courage—the courage to look ahead, to never give up, and to act in a big way.

I've known for some time that America's early industrialists were not "robber barons" but brilliant entrepreneurs and noble philanthropists. For example, John D. Rockefeller created the mass market for kerosene home lighting by driving down prices, and he gave back to society by funding hugely successful efforts in education and medical research.

I was pleased to see that Burton W. Folsom, Jr. provides a nice framework for understanding the early industrialists in his book The Myth of the Robber Barons. Folsom sorts them into two groups: the political entrepreneurs and the market entrepreneurs.

The political entrepreneurs were people like Robert Fulton (steamships) and Thomas C. Durant (railroads). Their reliance on government assistance led to high prices, technological stagnation, and corruption. Market entrepreneurs such as Cornelius Vanderbilt and James J. Hill were innovators who drove down prices and improved service.

I have seen both types of entrepreneurs throughout my career. Today, the political entrepreneurs (better known as "crony capitalists" on the right and "socially responsible entrepreneurs" on the left) are clearly on the ascent. Legitimate entrepreneurs don't need to add "socially responsible" to their job descriptions because they already provide products and services that people want and value. "Socially responsible" is simply another way of saying "political" and it means seeking public money distributed by government officials--often to people with the right connections.

It's sad to see our country repeating this mistake. Our education system, media, and political elite share the blame. The way to turn things around is to once again honor individual initiative and achievement, the source of most generous and effective giving.

These are evil times. The US economy is in critical condition. The consensus is that North Korea torpedoed a South Korean warship and Iran is developing nuclear weapons. Confidence in Congress has hit a record low of 11 percent, and thanks to Charles Rangel and Maxine Waters it will probably sink even lower.

Many years ago, I had a revelation. It’s simple, obvious, and common sense. People have made fortunes just by repackaging it. Most important, it works.

The revelation may have been said best by Walt Kelly in his Pogo comic strip: “We are confronted with insurmountable opportunities.”

The problem for most of us is not our lack of opportunities, it’s our inability to spot and seize them. And the most frustrating part is that the solution requires just 1% talent and 99% attitude.

Life presents most people with a constant stream of opportunities. But it takes a positive attitude to see and exploit them. Maintaining a positive attitude day in and day out requires a great deal of mental energy. To paraphrase one of the guys who made a fortune selling this bit of common sense, people create videos in their minds of blown opportunities that they keep replaying. The trick is to ignore or stop playing those video memories.

Admittedly, life presents some people with more opportunities than others. And a severe disability can put opportunities out of reach. But I’m convinced that most people get enough opportunities; it’s their attitude that is the biggest obstacle.

The History of Wireless and The History & Future of Medical Technology contain many examples of people who used the power of positive thinking to overcome hardship—including economic adversity. Here are four:

Michael Faraday – Whenever anyone suggests that we are cheating our children by not spending enough on education, I think of Michael Faraday. The son of a blacksmith plagued by poor health, Faraday received only the most rudimentary education. As an apprentice bookbinder, he educated himself by reading the books in his spare time. Faraday was also the victim of discrimination: rarely in that era did anyone rise above the class into which they were born.

(The education complaint also reminds me of one of my favorite cartoons. Bill Gates is standing at a podium delivering a speech. A guy in the audience whispers to a colleague "Imagine how far he could have gone had he not dropped out of Harvard.")

Faraday landed a job at the Royal Institution by sending Humphry Davy a bound copy of notes from his public lectures. Still, Davy’s wife treated Faraday like a servant. Michael Faraday didn’t let lack of formal education, lack of money, or lack of social status deter him from becoming one of the greatest experimentalists in the history of science.

Paul Galvin – Paul Galvin established Motorola as a major force in the wireless industry and he did it during the Great Depression. His original ambition was simply to become a successful small businessman. He learned along the way that a business needs to keep growing just to survive. After a string of failed businesses, Galvin succeeded by manufacturing and selling a luxury accessory (car radios) for a luxury item (automobiles). Though Motorola enjoyed its greatest growth under his son Robert, Paul Galvin proved it is possible to grow a business even in a stagnant economy.

John Gibbon – John Gibbon invented the heart-lung bypass machine, enabling surgeons to stop the human heart and operate on and even inside it. When he started his research (also during the Great Depression), almost no one believed it was possible to build a machine to temporarily carry out the functions of the heart and lungs. Plus, it took nearly 20 years of research before Gibbon performed the first successful “open heart” surgery. Gibbon is a shining example of how faith and perseverance can make the seemingly impossible possible.

Svyatoslav Fyodorov – Born in the Soviet Union, Fyodorov’s father was imprisoned during Stalin’s purges, and then the young Fyodorov lost a leg in an accident. He managed to become an eye surgeon and discovered that it is possible to correct vision by carefully cutting the cornea. More spectacular, Fyodorov cut through the USSR's bureaucracy and red tape to establish a nationwide system of clinics and even acquired personal wealth. Where there is a will, there is a way. Fyodorov’s technique, which relied on microscopes and an assembly line approach to surgery, was eventually eclipsed by laser surgery.

I’ve known Dewayne Hendricks for years as a fellow wireless entrepreneur but only recently had a chance to meet up. Just back from Saipan, he was on his way to speak at an IEEE conference at Southern Illinois University in Carbondale, Illinois. My son and I met Dewayne at Flaco’s Cocina where we talked about the FCC, entrepreneurial spirit, Buckminster Fuller, and ham radio.



Dewayne exudes two things that are in short supply these days—enthusiasm for technology and high performance standards. (Actually, high standards are always in short supply.) He’s spent much of the past 30 years trekking the globe, bringing broadband Internet access to users in developing countries (such as Mongolia and the Kingdom of Tonga), rural areas (such as Indian reservations), and other challenging locations (the Northern Mariana Islands). Think of Dewayne as a wireless IMF (Impossible Missions Force) agent.

Dewayne first came to SIU for a chance to interact with futurist Buckminster Fuller at Fuller’s World Game. Fuller invented the geodesic dome (the world’s first geodesic dome greenhouse can be visited at Shaw’s Garden in St. Louis) and wrote the book Operating Manual for Spaceship Earth. Dewayne ended up as Assistant Director of SIU’s computer center and is proud to call Fuller and Paul Baran (co-inventor of packet switched networks) his mentors.

Like my son and I, Dewayne got hooked on amateur (ham) radio as a teenager. While he pursues new technologies, Dewayne (callsign: WA8DZP) feels that too many hams are only interested in operating and not enough are interested in pushing the technology envelope. He was involved in early efforts to grow the use of spread spectrum in amateur radio, but encountered resistance. That reminds me of the CDMA debate during the early 1990s. When Qualcomm proposed that mobile phone operators use code division multiple access (based on spread spectrum) they were accused of technology fraud. Now there are 500 million users defying the laws of physics...

I was particularly struck by Dewayne’s take on amateur radio’s digital/packet data/Internet capabilities. Hams used to lead the adoption of new technologies; now they are playing with stuff that’s light years behind the commercial sector.

Which brings me to an idea. In order for amateur radio to grow, it needs to attract more young people. One way to do that might be to build a global broadband/mobile amateur radio Internet access network using spread spectrum technology. Perhaps the first steps would be to form a group to study the applications that are likely to appeal to young people; determine what is technologically feasible; and recommend changes to amateur radio service spread spectrum rules.

If that sounds like a wireless Mission: Impossible, then we better call Dewayne Hendricks.

This post is the final installment in a series based on my book, The History of Wireless: How Creative Minds Produced Technology for the Masses, published in 2008.



Most Creative People Are Not Team Players

I’ve read a number of books about creativity, and my research tells me that most of them are wrong. The authors go on and on about things such as collaboration, juxtaposition of ideas, and looking for patterns. There may be some truth in what they say, but they miss the point.

The simple truth: most creative people are highly individualistic.

A recurring lesson from the history of wireless is that creative people don’t accept conventional wisdom. As inventor Edwin H. Armstrong was fond of saying, “It ain’t ignorance that causes all the trouble in this world. It’s the things people know that ain’t so.” For example, Armstrong invented frequency modulation (FM) radio after a respected Bell Labs engineer said it wasn’t worth doing.

Creative people don’t have to be right about everything. James Clerk Maxwell’s theory correctly predicted electromagnetic waves. But it was based on the false assumption that space is permeated with a medium for the waves to propagate through—the luminiferous ether.

There are a couple of myths that need to be dispelled. One is that not knowing too much can help—that people who are too well trained develop blind spots. My research suggests the exact opposite. It’s the people who know a field inside and out who are most likely to push beyond its existing limits.

Another myth is that great ideas sometimes just come to discoverers and inventors by chance. Scientists and inventors will often tell you that, but it’s not true. The typical story goes like this: “I was working on idea x for a long time without making progress. So I decided to give it a rest. A little while later, the solution suddenly popped into my mind.” The lesson is that creative ideas don’t just roll off an assembly line. They may need to percolate for a while. I don’t call that luck—I call it checking back later.

A particularly popular myth is that new technologies can’t take off until there are industry-wide standards. This confuses cause and effect. The standards-setting process is extremely political and companies often use it to jockey for better position. If a small company invents a better mouse trap, then the first thing the market leaders will do is call for a standard. At a minimum, it buys them time to catch up. If they are shrewd, they can use the standards-setting process to offset or completely undermine the newcomer’s competitive advantage.

The final lesson is that timing is everything. This is something Thomas Edison understood quite well. It’s not enough to have a great idea; it has to be the right idea at the right time. Nor does the best technology always succeed. Sometimes just good enough for the moment wins.



Coming: The History & Future of Medical Technology

The National Venture Capital Association (NVCA) recently published a new edition of their Economic Impact of Venture Capital Study. Given the timing, I thought the purpose was to undermine calls for regulating the VC industry.

An article by Vivek Wadhwa (What Have VCs Really Done for Innovation?) claims the NVCA exaggerates the role of VCs in creating and driving innovation--to the detriment of entrepreneurs who often risk everything they own. He claims the NVCA is looking for handouts:

What’s behind the NVCA’s voodoo economics? Even though they vehemently deny it, VCs are looking for bailout money and tax-breaks. After spending so much time, energy and breath in the past decade arguing that government subsidies distort markets, now the wealthy, bloated VC community wants its own handouts.

Wadhwa also links to a story at BusinessWeek (Venture Capitalists Head to Washington) in which he is quoted. The article claims the NVCA is trying to tap the Small Business Innovation Research program. I don't generally trust BusinessWeek, but I must assume the quote by NVCA president Mark Heesen is accurate:

"This is an Administration with individuals who understand and respect technology," says Mark Heesen, president of the National Venture Capital Assn. (NVCA), the industry's primary lobbying group. "And from Obama on down, there is a view that innovation is key to getting us out of this economic situation."

On the contrary, the Obama administration is pushing primitive technologies such as windmills and lifestyle/preventative medicine, while dreaming up new ways to punish advanced technologies such as medical devices (re: AdvaMed) and the Internet ("Net Neutrality").

Kudos to George Gilder (The Israel Test) for cutting through the fog and showing everyone what the Israeli-Palestinian conflict is really all about.

It’s not about denying Palestinians their land, right to self-determination, or dignity. It’s about the Palestinians’ hatred of Jews and the Left’s hatred of free enterprise.

If you believe that European Jews swooped into Palestine and stole the Arabs’ land, you need to study Middle East history, because that’s simply not what happened. I suggest you start with Mark Twain’s travelogue, Innocents Abroad. Mark Twain did not have a dog in the Jews versus Arabs fight because he wrote his book in 1869—twenty-seven years before the founding of the modern Zionist movement. The book is about Twain’s journey to the Holy Land and his astonishment upon discovering that outside of Jerusalem it was all but uninhabited. Study further and you’ll learn that it was the Ottoman Empire that ruled Palestine up until World War I, and that the British gave the majority of Palestine (76%) to the Arabs in 1928. Considering that Israel has offered to relinquish the West Bank and Gaza since 1967, it’s clear that the Arabs could own 90% of Palestine today—were that what they were really after.

The Israel Test is also unique in that it celebrates Israeli high tech entrepreneurship. I couldn’t help but experience feelings of déjà vu as I read about some of the people and companies. Though I was first introduced to Israel’s fledgling high tech industry in the early 1980s, like Gilder I later met two of Israel’s best ambassadors of high tech, the late David Medved (Chairman of JOLT) and his son Jonathan (venture capitalist and CEO of Vringo). Israel is busy inventing products that save lives, make life easier, and make life more pleasant. What positive contributions are her enemies making?

That leads me to a new idea. Given that Israel is increasingly hospitable to high tech startups, and that the U.S. is increasingly inhospitable (with the exceptions of not-for-profit and “green” enterprises), perhaps this would be a good time for Israel to offer itself as a business haven for American high tech entrepreneurs. I don’t know what if any barriers there are to American entrepreneurs setting up shop in Israel, but I suspect the current Israeli administration would be open to lowering or removing them.

Yesterday I attended a fascinating lecture by James L. Cox, MD on prosthetic heart valve design at Barnes-Jewish Hospital in St. Louis. However, there was one thing about the lecture that struck me as odd—yet consonant with the times. Dr. Cox (who retired from clinical practice) expurgated the names of the private ventures with which he is involved from his slides. For example, in a photograph of the headquarters of one venture the firm’s name on the building was blacked out.

I found that silly. There is nothing wrong with profiting from products that prove useful to others. Plus, there are better ways to allay fears that a presentation is merely a disguised sales pitch. First, provide useful and accurate background information. Second, describe what you feel are your product’s strengths and what competitors and critics say are its weaknesses. Third, trust your audience’s natural skepticism and deal with it directly and honestly.

The main thrust of the presentation was that form should follow function. While some artificial heart valves mimic the appearance of natural heart valves, it’s more important that they mimic the performance of natural valves. Dr. Cox (also known for developing the Cox maze procedure for treating atrial fibrillation) explained that that requires looking not only at basic valve function but factors such as turbulence, stresses on adjoining tissue, and so forth. His company, ATS Medical, offers both mechanical and biological valves.

One of the most interesting ideas discussed was percutaneous valve replacement—deploying a replacement heart valve using catheters. The valve is contained in a stent which, once in position, is expanded to push the natural valve leaflets aside. This isn’t a totally new concept—nor is it in widespread use. The “form follows function” design approach can be beneficial here, as well.

Letting yourself become consumed by priority disputes is one of the biggest mistakes that a scientist or inventor can make. While creators and discoverers should seek proper credit for their achievements, it’s important to recognize the most effective ways of securing credit, and to avoid getting caught up in prolonged public spats.

Many disputes arise when a scientist or inventor suggests an idea to someone who then builds on it, acquiring wealth and fame as a result. A good example is the 17th century argument between Robert Hooke and Isaac Newton. Hooke protested that he was first to describe the forces that determine the orbital motion of planets and that Newton failed to recognize his contribution in his great book, Principia.

There is compelling evidence that Hooke was first to suggest the ideas, because Newton acknowledged the fact in private correspondence. However, it was Newton who produced and published a comprehensive theory, and Hooke freely admitted that Newton took the ideas much further than he had considered.

Hooke’s position was weak. The best he could have hoped for was an acknowledgment from Newton. However, Hooke was in some ways his own worst enemy, publicly and aggressively challenging some of Newton's other ideas. It’s understandable that Newton lost whatever sympathy he had for Hooke’s claim based on Hooke’s subsequent behavior.

The lesson of history is that it is not enough to be first to propose an idea. The greatest credit goes to those who conduct a thorough study and either publish their findings or produce an invention based on those findings. To wit, history rightly favors those who do something with ideas.

Hooke only made matters worse by continuing to argue his case. His lobbying efforts must have made colleagues uncomfortable—given that most probably wanted to maintain friendly relations with both men. Hooke was a prolific scientist; what he should have done was be sure to follow through the next time he had a good idea. (In fact, Hooke made a habit of jumping from one line of inquiry to another, and rarely carried any through to completion.)

There have been many similar cases throughout history. There comes a time when the plaintiff needs to let go. Being first is not the only determining factor. When Marcel Gley publicly protested that he and not Frederick Banting was first to discover insulin, Oscar Minkowski replied “I know just how you feel. I could also have kicked myself for not having discovered insulin, when I realize how close I came to it.”

What makes a scientific experiment beautiful? A few years ago Physics World asked readers to nominate the “most beautiful experiment in physics.” The results were not terribly surprising. Readers picked Thomas Young’s double-slit experiment demonstrating that light interferes with itself as the most beautiful. My favorite—Rutherford’s experiment discovering the atomic nucleus—came in ninth place.

If beauty is in the eye of the beholder, then I have no reason to complain. However, Physics World also asked readers the reasons behind their selections. Their answers show that readers do not consider this type of beauty purely subjective. Robert P. Crease summarized their reasons as “transformative,” “economy,” and “deep play.”

Those reasons strike me as partly right and partly wrong. What makes an experiment beautiful is that it is cleverly designed, dramatic, and reveals something fascinating about nature. Everything else is fluff. For example, when someone calls an experiment “transformative” it tells us more about modern conceit than the experiment's merit. Like "disruptive" and "path breaking," it's pure cliché.

Thomas Young’s double-slit experiment was beautiful. Unfortunately, it was also somewhat misleading. One purpose of science experiments is to resolve controversies. Thomas Young’s experiment showed the wave nature of light. Other experiments demonstrated the particle nature of light. It wasn’t until much later that a modified double-slit experiment demonstrated wave-particle duality.

I have reservations about some of the other top ten choices. Newton’s “decomposition of sunlight with a prism” illustrated a fundamental concept, but it was hardly very clever. Similarly, the only thing original about Galileo’s “experiment on falling bodies” was his explanation. And Eratosthenes’ “measurement of the Earth’s circumference” relied on a combination of observation and theory—not experimentation.

Rutherford’s experiment showed that while atoms consist mostly of empty space they contain a tiny and relatively massive core he dubbed the “nucleus.” In this experiment, a beam of alpha particles was used to bombard a very thin gold foil. Studying scattering of the alpha particles, Rutherford found most traveled straight through, some were modestly deflected, and one in 8,000 bounced straight back. (He verified that the bounce backs were not just a surface phenomenon.) Rutherford famously stated “It was almost as incredible as if you fired a 15-inch shell at a piece of tissue paper and it came back and hit you.”

Rutherford followed that up with another beautiful experiment. He wanted to prove that alpha particles are helium nuclei. He directed an assistant to make a glass cylinder and place another, slightly smaller glass cylinder inside. The wall of the smaller glass cylinder was extremely thin: 1/100th of a millimeter thick. This allowed alpha particles emanating from inside the inner cylinder to enter the space between the two cylinders (after the air had been removed) but not escape through the outer cylinder’s wall. After collecting alpha particles in the space, he zapped them with electricity and examined them with a spectroscope. They showed the spectrum of helium as expected.

A beautiful experiment doesn’t have to be perfect, but it must significantly increase our knowledge of the natural world in a way that is repeatable and verifiable. With all of the distractions that surround modern science, researchers would do well to revisit beautiful experiments from time to time.